Archive for the ‘Contract Administration’ Category

From the National Council of Textile Organizations (NCTO),which represents domestic textile manufacturers, the Senate’s 92-7 vote to pass Fiscal Year 2017 National Defense Authorization Act (NDAA) according to NCTO President & CEO Auggie Tantillo is “a good bill.” Tantillo says of the bill “It supports American troops, strengthens our national security, and includes many provisions important to the US textile industry.”

The Department of Defense (DOD) sourced roughly $1.5 billion (USD) in textiles and clothing in 2016. Textiles fall under the buy-American procurement provision known as the Berry Amendment. The Berry Amendment (10 U.S.C. 2533a) requires the Department of Defense to buy textiles and clothing made with 100% United States content and labor.

The FY 2017 NDAA conference report reflects several other positive outcomes for the US based textiles industry. (1) no increase to the simplified acquisition threshold (SAT). Procurements in excess of the SAT require compliance with the Berry Amendment. The SAT level is $ 150,000. If the SAT threshold were increased, contracts might be awarded to international bidders and a lose for US industry. (2) the athletic footwear voucher program that has been in place for decades ended. Now the works begins to ensure all athletic footwear purchased by DoD is Berry-compliant. (3) DoD and the State Department procurement officials have been directed to provide key congressional defense and foreign relations committees updates on how each department is making efforts to ensure US manufacturers are aware of procurement opportunities relating equipping foreign security forces. Information source: http://www.ncto.org

What do Chiquita bananas and Hurricane Relief have in common? Well a lot actually but its a story that isn’t often told. If you didn’t know it bananas, are grown at farms in tropical regions of the world. The banana industry in the United States gets its bananas from tropical regions like Costa Rica, Guatemala, Honduras, and Panama. This supply chain started back in 1899 when American railroad companies operating in South and Central America merged with the Boston Fruit Company to create the United Fruit Company. In the 1920s, the United Fruit Company established a powerful organization in Honduras exporting to and gaining the dominant market position in the United States. The company cleared and planted lands for bananas developing extensive road, railroad and port facilities. The company also built housing and schools for the children of employees, hospitals, and research laboratories. It could be said that many of these roads and the only deep water ocean port in Central America form the basic transportation network in Honduras today.

Photo Jonathan Long

In our post 9/11 world many have never heard of the US Military operations called “New Horizons.” This is an engineering and medical exercise to benefit the people of Central America and the Caribbean. During these missions, military engineering teams deploy from the United States to build

Photo National Weather

On now to hurricanes. Bananas aren’t the only things that grow in the tropic areas – hurricanes do too. One hurricane in particular, Hurricane Mitch, was the most powerful and destructive hurricane of the 1998 Atlantic hurricane season, with maximum sustained winds of 180 mph. The Category 5 Hurricane (SSHS) killed more than 11,000 people and some estimates put the figure as high as 18,000, making Mitch the deadliest storm in the Western Hemisphere since the Great Hurricane of 1790 (1). Hurricane Mitch delivered 180 mph winds while hovering over Honduras for more than a week and sustained winds of 285 km/h (178 mph) for 15 hours.

Photo Jonathan Long

While we in Panama watched with dread, there was little anyone could do while the storm raged. We had been planning for follow on construction operations in Honduras after the 1997 exercise but now all schedules were dramatically accelerated. Our mission changed from national assistance for Honduras to humanitarian assistance. From my point of view, this change in mission occurred naturally and was very smooth. Maybe this change seemed so smooth because we had just completed the gigantic “relief in place” after a yearlong operation in Bosnia. In 1996 we moved from a European based Implementation Force (IFOR) of 60,000 (which I was part of), to a Stabilization Force (SFOR) of about 30,000 (2). This was a classic “relief in place” conducted on a huge scale but others may have a different view. Little did we know at that time that conducting RIP/TOA (relief in place / transfer of authority) would become so common place during the wars in Iraq and Afghanistan.

Photo Jonathan Long

Immediately after the hurricane, the U.S. responded with over $300 million in humanitarian assistance, providing food, medicine, emergency shelter, and agricultural assistance through the US Agency for International Development (USAID), the U.S. military, the U.S. Department of Agriculture (USDA) and civilian relief workers – again another example of joint operations similar to what we had just conducted in Bosnia and a foreshadow of Iraq and Afghanistan operations. My job was to provide the on the ground, contracting assistance for all construction logistical support in Honduras. Following Hurricane Mitch 5,300 military personnel were deployed to Central America, representing all four armed services and reserve components – again Joint Operations.

So what did we do, what does this have to do with bananas and why is the US Military so

Photo Jonathan Long

successful at responding to calls for international help? I think our success results from our adage “train like you fight” meaning we don’t have one standard for training and expect some other outcome when its “go time.” First things first, we had to get the personnel and their equipment from the United States into Honduras – no easy task since the ports had sustained damage and one port was closed unable to receive the roll-on/roll-off ships. These LMSRs are huge capable of cargo-carrying capacity of more than 300,000 square feet. The Port of Cortes was our only reception point.

The operation was little different than similar missions I had conducted while rail loading M1 Tanks in Korea for Team Spirit or moving a Signal Battalion of soldiers and equipment from one end of Germany to another. However, unlike Korea and Germany, there were no established logistics elements at the embarkation point, along the route or at the destination. All that support would need contracting. We contracted for food, contracted for living quarters, contracted for line haul transportation for heavy equipment, contracted for cleaning services, and contracted for building materials. The key was synchronizing all these contracts so they were delivered or performed at the right place and at the right time. No less was acceptable – but it was difficult to do while located in Panama.

Photo Jonathan Long

Within days after the flood waters had receded from the airport in San Pedro Sula and the airlines partially resumed flights, I caught a flight to Belize (which was accepting commercial aircraft) and then a twin-engine prop plane into Honduras. Luckily I had provided very similar logistical contract support the previous year in Honduras, I knew the general layout of the area and many of the contractors located in the vicinity. When I arrived at the airport I could see the discolored and muddied height of the flood waters reaching a height of about 9 feet but it was the mud that caused the runway closure. The destruction caused by the storm was immediately evident and devastating to roads, bridges, and homes.

What made the most dramatic impression on me were the blue tarps strung in the mediums of the roads providing temporary shelter to families whose homes were lost to the storm. It was dramatic but a completely different disaster

Photo Jonathan Long

environment than that I had just experienced in Bosnia where homes; while still standing, were pock marketed with bullet holes, partially burned and in many cases walls pierced open by tank rounds. In both cases the people were living in elemental conditions without electricity, running water, heating or cooling or toilets. In both cases, the people were now refugees in their own country. Whether from either ethic warfare or natural disaster both were equally cruel, especially on the kids.

Photo Jonathan Long

Back to bananas. Here is where the infrastructure work developed by the United Fruit Company in the 1920’s came into play – most if not all the routes we used to move personnel and equipment around Honduras were built on the road networks developed to support the banana export business. That was my first order of business before I could develop the contracting support needed, I had to locate the planned base camps and construction sites so I would know where contracted services and supplies would be delivered.

In some cases, because of the preplanned development projects, these camps were in remote locations and in some cases, they were

Photo Jonathan Long

not. Regardless of location, I travelled to each work site to make sure required sand, gravel, cement and concrete could be delivered by commercial transport. That is not to say these roads were in great shape to start with but believe me when I say they were worse after the hurricane. In some cases, we did contract for private airfields to enable the delivery of supplies and personnel by US Aviation, specifically in the direction from San Pedro Sula to Yoro.

Once the materials were on site and the contracted services began performance, the US Military took over and started to work. We worked with and trained Contracting Officer Representatives (COR) to manager the performance and ensure that we received the quality of materials and supplies that we required. During this time, military personnel are credited with rescuing more than 1,000 people trapped by flood waters providing medical care and immunizations to over 35,000 people. Our construction battalions cleared major roads (some as old as the 1920’s) and bypasses, as well as erecting prefabricated bridges (Bailey Bridges). Our military personnel rebuilt medical clinics and schools, and provided communities with safe drinking water by building wells. Military aircraft, including 53 helicopters were deployed throughout the region to assist distribution delivering more than 3.2 million pounds of food and more than 500,000 gallons of water. It is reported that the military transported to the region almost 8 million pounds of food, clothing, medicine and relief items donated by American citizens (3).

President Clinton called the U.S. Southern Command NEW HORIZONS response to Hurricane Mitch “the largest humanitarian assistance mission since the Berlin Airlift.” Honestly at the end of each long day it wasn’t about a Presidential proclamation, or about the danger and excitement of running historic roads or even about traveling through miles and miles of epic date palm and banana plantations; it was about choosing to be in a position where we know we helping individuals make their world and ours a better place. So whether we used roads built for the banana business or not, whether operating in the Korea or Bosnian winter, or the heat of Iraq or Afghanistan – and even in hurricane drenched Honduras, that’s what’s in common – working to make the world a better place.

Berry Amendment has no commercial exceptions for food, textiles, or hand or measuring tools, BAA has exception for commercial information technology

For Berry, qualifying country exceptions exist for chemical warfare protective clothing (all qualifying countries) and (Netherlands only). For BAA, the qualifying country exception applies to all purchases

Berry applies for contracts performed worldwide, BAA applies to U.S. only

Berry has no contractor certification requirement

Key take aways are that the Buy American Act compliance does not equal Berry Amendmentcompliance and that both laws apply to DoD but Berry is more restrictive. For more information on which countries fall within the BAA please see DFARS 225.003 for details. Partial list follows as: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Egypt, Federal Republic of Germany, Finland, France, Greece, Israel, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden,Switzerland, Turkey, United Kingdom of Great Britain and Northern Ireland.

THE FINE PRINT – the Berry Amendment (10 U.S.C. 2533a), covers textiles, food and hand or measuring tools. Specialty metals are no longer part of this law. Specialty metals are restricted under Section 842 of the FY2007 NDAA. You can find all the details as implemented through the Defense Federal Acquisition Regulation Supplement (DFARS) at Subpart 225.7002. The contract clauses that apply to the acquisition of the items listed in A.1., above, are DFARS 252.225-7012 and DFARS 252.225-7015 You can also find policy on the Berry Amendment in Procedures, Guidance and Information (PGI) 225-70. For more information on Defense Procurement and Policy (DPAP) please visit http://www.acq.osd.mil/dpap/cpic/ic/berry_amendment_faq.html

While I would love to take credit for these “gems” of contracting wisdom I cannot – it with full concurrence from Mr. George Chavis that I share these “Things we thought we would never have to remind the contracting workforce.” While this list seems obvious or humorous, from George’s point of view, these are errors he sees everyday. I thought it was a good idea to share with all acquisition professionals who are the target audience for this blog in the hope that by bringing these errors to the attention of both government and industry contracting professions, the end result will be contracts with fewer errors and required less re-work.

So lets take a look:

1. In order for there to be multiple awards, more than one contract must be issued.
2. Internationally renowned leaders in an industry (e.g. WalMart, Lockheed Martin) are unlikely to qualify as “small businesses” in that industry.
3. The line items must add up to the total.
4. Line items must describe what is being bought.
5. When a line item has two or more separately deliverable parts, the quantity on the line item cannot be 1.
6. Orders and modifications against contracts and schedules must be placed with the contractor who received the contract or schedule.
7. “C”-type definitive contracts cannot be used as indefinite-type contracts (IDCs) with “P” modifications acting as “orders.”
8. “Dollars” are not a unit of measure–we don’t purchase dollars.
9. When deciding to ship an item, the destination must exist.
10. In order for an organization or person to be delegated an action (e.g. acceptance), the organization or person must exist and be capable of performing the action.
11. Acceptance is an inherently governmental function and cannot be assigned to a contractor.
12. Cost type contracts cannot be paid with a purchase card.
13. Contracts must be issued in writing in a form readable by humans.
14. A contract awarded as “firm fixed price” cannot have an “estimated” value.
15. In order to have “not separately priced” items on an order, it is necessary to also have separately priced items.
16. A grant is not a contract.
17. There is no need to send a letter to the people awarded a contract informing them that the funds on the contract have been obligated on the contract.
18. If you use one identifier for the shipping location, packages can only go to one place. If you want packages to go to two places you need to identify both locations.
19. When numbering things sequentially, do not use the same number twice.
20. When numbering in a specific series, do not start with the last number.
21. If the format for a numeric field (e.g. total value) allows for “up to” eleven digits, that does not require you to actually enter an eleven digit number.
22. The contract price has to be part of the contract.
23. Working for a field organization in the Defense Department does not mean that you are in the “Office” of the Secretary of the Army (or Navy, Air Force, or Defense).
24. The concept of rounding applies to units and subunits.
25. You cannot round the amount of funding available UP to the nearest dollar.
26. You cannot award a contract for more money than the entire Department’s budget.
27. In order for all deliveries to be complete on a contract, the first delivery must have occurred.
and finally –
28. One cannot cite as authority for an action a statute that does not exist.

So I hope this list stimulates some thought and maybe a “look-up” to a reference in the Federal Acquisition Regulation to confirm a point or two. Thanks again for compiling this list of commonly found errors in contract data.